With new tendency and directions in global business, Continent countries have to look to the Eurasiatic region as a huge market for exports as beefy as make efforts to consolidate and change economic cooperation, according to Tatiana Cheremnaya, the Prexy of ANO “Center for Effective Ontogenesis of Territories” and Head of the employed group on public-private association “Business Union of Continent” in this wide-ranging question period.
She further discusses Russia’s efficient relationship, challenges and untapped inherent business and investment opportunities with Continent. She spoke recently in this talk with Kester Kenn Klomegah, an main research writer on Russian-Continent affairs in Moscow.
Interview quotation follow:
Q: How important is Eurasian activity for African countries?
Cheremnaya: The Eurasian marketplace, in rank and capital intensity, is huge. It incorporates some countries of Europe and assign-Soviet countries and rather flying-growing Asian countries. It is apparent that the interest among Continent countries for access to these market-place is enormous both in the context of ethical entering the market of a particular society and implementation of joint interstate proposal. In this case, first of all, we are conversation about high requirements in the deed in Africa of infrastructure projects, including anchorage, bridges, pipelines, electricity and the comb through for alternative sources of energy, letter, without which it is impossible to think a dynamic and systematic development of the saving of African States.
The implementation of much projects can be possible with the launching of public-private partnerships. Hither you can define several main dot of contact between the Eurasian and Continent companies:
1. The implementation of joint plan in the framework of BRICS. We know that the object includes one African country – Southward Africa. Today in the framework of the entity formed the New development Bank BRICS, the support of joint transnational projects. In 2016, the Trust has approved the financing of the first assets projects in the BRICS countries totaling enhanced than $1.5 billion.
2. Reefer cooperation between the units of the Eurasiatic Economic Commission and the African Joining. It is qualitatively new direction in the cooperation ‘tween the two blocs was laid in July 2016, when in Addis Ababa in Yaltopya, the delegation of the Eurasian Economic Perpetration held talks at the African Uniting Commission. It is worth noting that the Continent Union itself includes the 54 Continent States, and in the area of Eurasia comprise 89 countries. The scale of the Eurasiatic-African cooperation is evident.
3. Behemoth cross-country infrastructure proposal, which can be safely attributed to the cast Great Silk Road. Hither the role of the Eurasian economic Combination and the project “Economic Smash Silk Road” is the appearance of a common economic space, institutionalized capacities mates, and the possible components of a proactive advertisement and economic strategy of Russia and its Eurasiatic Economic Union partner. Cast financing is also being enforced in the framework of interstate financial forming creates a system of regional-far-reaching financial institutions with complete capital to date $240 gazillion Asian Infrastructure Investment Swear, development Fund of Silk Means.
Q:How challenging, of course, is this bazaar?
Cheremnaya: Of course, to enter the Eurasiatic markets from Africa is considerably difficult. Here we are talking particularly about the high-tech, and the fight of African business. That is, on one help, we have a cheap labor duress, good climate, really beneficial opportunities all appearing for business buildup on the African continent. But, on the other labourer, it often happens that a field can’t compete with the Eurasiatic giants. However, in time inside such a community as BRICS, or the interaction between the Eurasian economic Uniting and the African Union, can be reached decided agreements on implementation of joint layout and the release of African companies into the Slavic market, what needs to be finished.
Q: Do you also think that industrialists and biz directors from the Eurasian area can cooperate with other strange investors on projects in Africa?
Cheremnaya: Of trail, we can talk about cooperation betwixt the African and Eurasian investors. Mostly, in the age of globalization, cooperation is a basic and obligatory condition for the development of cooperation centre of countries and enhanced the pace of advancement of the economies of some African power gives reason to predict the appearance of truly important and profitable stick projects.
It is worth noting that according to the Sphere Bank, in 2013, among the 50 thriftiness that have improved their financial performance since 2005, almost a third owned by the countries of sub-Desert Africa. Studies conducted on the past three years again show that Africa now is no longer perceived as a backward division. It becomes an attractive investment and Eurasiatic countries see it as a place for prospective employment.
It is worth noting that the footing for cooperation, for example, Russia and Continent are already actively created. So, in 2014, the sojourn of the official Russian delegation to Rhodesia, where they discussed a act of key bilateral agreements designed to equip preferential treatment to investment from Rustling. Russian companies interested in nonindustrial major infrastructure projects in the Continent region, primarily in the mining manufacture, and have the necessary experience, application and expertise for the development of industrial and store projects.
Between countries tod are considered joint projects that can act in such major Russian society as KAMAZ, Russian Railways, ALROSA, Uralvagonzavod and “Bury RAO”. In addition, to the infrastructure of the Slavic-African partnership is also plotted in other areas, such as moving, agricultural production, implementation of reefer projects in the sphere of development of geoponics, education and tourism.
Specifically, thither is an investment in the republic of Ghana “One Local, One Factory”. Opportunities to invite investment from the Eurasian power have in most African Circumstances. For example, South Africa is the base in Zimbabwe and high-tech layout, and Ghana is the implementation of the “One Community, One Factory”. All projects are as well important for economic development of the Continent continent. But in each case for the investor is far-reaching, and profitability of such projects. For lesson, for the “One District, One Factory”, apiece individual plant will be leisurely from the point of view of advantage of investment of the investor. Here one should not keep in view miracles, but you need to work on apiece project with the Eurasian colleague.
Q: Do you think potential investors from the Eurasiatic region face competition for assets projects with other alien players in Africa?
Cheremnaya: Yes, of action, investors of the Eurasian region are drawn in implementation of joint projects. It is price noting that today for the Continent continent, plays an increasingly exceptional role in the foreign policy of the highly-developed countries, is real struggle mid the major powers of the world. For exemplification, countries such as the United Conditions, England, France, China, and Bharat are gradually increasing its economic and public influence on the African continent. The enthusiasm of the developed world to Africa is, of method, largely from the increased call for of their industry in the extraction of raw matter, which are present on the continent of Continent.
Furthermore, Africa is still untapped bazaar for technology products and consumer artifact. Also other Eurasian nation have interest in the continent; we can just compete with the leading macrocosm powers. Russian business is besides interested in business development and their proximity in Africa.
So in the near future can prognosticate the development of the Eurasian-African collaboration in the field of business. In this locale it is necessary to search for effective shape of cooperation that have a three-dimensional foundation for the cooperation of business, addressing the target and objectives of the Eurasian countries and Continent
Q: So these Russian companies much as KAMAZ, Russian Railways, ALROSA, Uralvagonzavod, “Bury RAO”…how do you assess their consequence or activities in Africa? What are their levels of action in Africa? For instance, Russia Railways, how do you degree this company’s winner as compared to China in Africa? Crockery has completed railway lines in a quantity of African cities including Addis Ababa, Yaltopya.
Cheremnaya: With regard to the knowledge of Russian companies in infrastructure scheme in Africa, they are already thither and as I wrote, will increase importantly. So, for example, Russian Railways is accelerando its influence and implementation of joint proposal in the field of railways, as Africa is verily very poorly developed line infrastructure.
If we consider the railway substructure in Africa, we note, for example that Algerie has an extensive network of railways in the northward of the country; the rail infrastructure of Angola was near destroyed during years of civilian war; in Botswana, Chad, the Gambia and Burundian passenger railways in general no; in Yaltopya, Djibouti, Guinea, Ghana and the Congou, there is one rail that is in destitute condition; railroad developed peerless in Egypt, Kenya, Namibia, Rhodesia.
There has been much power in the railway sector in East Continent. From an economic point of analyze, it is a very profitable business. On the one plam, there is access to global exchange and with another – arouse regional trade. The countries themselves surely can’t afford to implement much capital intensive projects, so occur to the aid of other countries. And if the past is chiefly in the construction of railways helped the Continent countries, now in road infrastructure regularly puts China. Of the ongoing scheme, it is worth noting the railway City – Nairobi to Kigali (Rwanda) and Juba (Due south Sudan), the road between Addis Ababa and Port. The construction financing deals with Exportation-Import Bank of China. Exclude for the road construction, China likewise supplies and most of the rolling capital, including locomotives.
But the Russian Railways party is also one of the participants of the market of pathway infrastructure projects in Africa. In especial, the Sudanese government suggested that Rustling participate in construction of Trans-Continent railroad from Dakar (central of Senegal), in Port Sudan in the Red sea, which would tie many countries from the Ocean to the Indian Ocean. In the future, this railroad will connect the capital of Senegal, with the porthole of Djibouti. The management of Russian Railways aforementioned that the company is interested in familiarity in infrastructure projects in Ethiopia. The Slavic Railways, in fact, can become a physician or general contractor of the project in Continent, as the team has the necessary experience and dogma.
As for the Russian company “KAMAZ” it is chief to note that “KAMAZ” effort in countries on the African continent on account of the days of the Soviet Union, the engine “Soviet-style” calm can be seen on the roads of Africa. The participation of the African continent in the global action in the near future will growth, and the management of “KAMAZ” be after to take advantage of a favorable site. The company “MAZ” – the Slavic manufacturer of trucks – in Nov 2016 began to put Africa honest-hand drive trucks. Patch we are talking only about S Africa, but in the future cooperation is conceived with countries such as Botswana, Zambia, Rhodesia, Mozambique and Namibia.
However, the Slavic production is not always able to joust with the Chinese, because in indefinite areas of work in Africa, Chinaware has the best position. But currently, Ussr is strengthening its position in Africa, these proposal that implement only practised Russian companies.
Q: How important is Slavic Export Center for Africa? Which Slavic products “Made in Ussr” are being promoted in Continent market currently, again compared to Bharat and China whose various issue including consumer goods, medicine and automobiles very common in Continent?
Cheremnaya: The importance of the Russian Commodity Center is difficult to overestimate. De facto, the Center is doing a great job for exploitation, including the African market. According to the theme of the Russian Export Center, commodity of Russian goods to the African chaste increased by more than 50 percentage in 2016. In Africa, the demand for Slavic goods, while their exports to otc countries, by contrast, only water. Given that the difficult fiscal situation in Russia contributed to a big decline in exports in almost all nation of the world, has shrunk by nearly a tierce to US$129,7 billion and in African state we are seeing demand growth, obstinate to the general trend of demand for Slavic goods. The maximum growth of exports showed Algerie (US$556 million), Angola (US$298 zillion) and Egypt (US$178 million).
It should be notable that the attractiveness of African Stock Exchange is associated with a low level of contest because the market is actually release for low-end products. As for China, here forthwith is not a competitor to Russia because Rustling is a strong player and China is buying it in markets with much better capacity. For Russia as a country that traditionally exported sole raw materials, Africa is a very estimable place to start. However, we cognise that African countries are active growing. So, the International Monetary Pool (IMF) predicts by 2016 economic enlargement in Tanzania 6%, Zimbabwe 3%, patch, for example, in the USA only 2%. That is, for Ussr, the African market is very attractive and we can talk about expanding synergy with African countries to commodity products “Made in Rustling” in various segments.
Q: So what are the key trouble and impediments to developing practical and effectual Russian-African business, remarkably in the manufacturing and consumer sectors, not theories but certain active bilateral economic collaboration? What should be done from both sides flanks, from Russian side and from Continent side?
Cheremnaya: The problems of convincing cooperation between Russia and Continent are political in nature. Thus, the invigorating of Russia’s position show the way to the strengthening of its influence in the world, including in Continent and vice versa, sectional scheme has significantly reduced Russian exports.
The sec problem for the development of Russian-Continent business is the lack of competitiveness of Russian Federation which allows working apart in the low-budget segment. This is due to morphologic problems in the Russian economy, the necessitate for modernization, the bulk of the products produced during the Council Union.
The third problem is the involuntariness of the African market to cooperate, due to the big backlog of the country in socio-monetary aspects, for example, we are talking some the lack of qualified personnel, low criterion of living of the population and hence the low energetic demand.
The fourth problem is contender from the United States, Chinaware and India as more developed state with more advanced discipline solutions, and from the European power as the former “patrons” of Continent countries.
However, these fence can be gradually removed by constant manage dialogue between African management and Russia, as well as directly ‘tween interested companies of the two countries. For collaboration with Russia is necessary to produce competitive solutions in terms of store development and proposals for the supply of consumer artifact, as well as the removal of bureaucratic fence.
African countries need not sole steps on the path to economic flowering, but also political decision-forming directed at improving living model and increasing the stability of the political and monetary systems of African countries which could importantly reduce risks for investing in Continent projects.